Recent Shareholder Activism in the U.S. Convenience Store Industry Convenience Store & Fuel Products Distribution Investment Banking SCOTT GARFINKEL ROGER WOODMAN Group Head Managing Director Nashville, TN // 615.645.6796 Atlanta, GA // 404.240.6864
[email protected] [email protected] DAVID CORBETT JOHN VEITH Senior Vice President Vice President Atlanta, GA // 404.279.7442 Nashville, TN // 615.645.6799
[email protected] [email protected] Activist Shareholders Have Been Significantly Influential in the U.S. Convenience Store Industry Overview & Case Study Takeaways Shareholder “activism” refers to a range of tactics utilized by shareholders of a public company to influence some desired change in the corporation. High profile examples might include Bill Ackman’s unsuccessful effort to convince the world that the nearly $4 billion company (by revenue), Herbalife, was a deceptive pyramid scheme, inspiring the documentary, Betting on Zero. Other battles involving Automatic Data Processing, Procter & Gamble, CSX, and Buffalo Wild Wings grabbed headlines in 2017. On the less assertive end of the spectrum, a shareholder proposal may be put forth and sponsored by certain engaged shareholder groups (e.g. pension funds) to effect change in governance policies or compensation plans. Shareholder activism has become a more normalized practice to effect change in a company; currently, direct activist assets under management (AUM) are estimated at approximately $121 billion(1). In 2017, this arsenal was deployed to launch 231(2) public campaigns in the United States, lobbying for changes to companies’ strategic directions, asset mixes and management and/or board compositions, among other demands. As a proxy for their success, over the past decade, activist investors have contributed to the appointment or replacement of more than 1,000 public company board members(3).